Slide 1: First Quarter 2013 Financial and Operational Results
First Quarter 2013 Financial and Operational Results
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-looking statements in this presentation, including statements regarding demand for our products and the economic and other factors that drive that demand, product development plans and timing of those plans, acquisitions, expansion and modernization plans and our e
Slide 3: Financial Summary
Financial Summary Q1 13 v Q1 13 Q1 12 Net Sales $2,403.1 +5.7% Gross margin 22.2% +50 bps Operating income $177.4 +4.5% Operating margin 7.4% (10 bps) Diluted EPS $1.19 ($0.02) 3
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units ~Flat • Production ~Flat in Q1 13 vs. Q1 12 − Growth in SA offset by decline in Europe • Full year 2013 production expected to increase 5% to 7% vs. 2012 Q1 Q2 Q3 Q4 2012 Production 2013 Production 4
Slide 5: Industry Overview
Industry Overview March Year-to-Date Retail Units North America 2013 vs. 2012 Tractors • Industry +13% Combines • Industry + 52% Western Europe 2013 vs. 2012 Tractors • Industry (5%) Combines • Industry (22%) South America 2013 vs. 2012 Tractors • Industry +23% Combines • Industry +49% 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2013 $2.4B North South America America 26% 19% APAC 5% Q1 13 vs. Q1 12 Net Sales EAME Excluding Currency Translation* 50% +26% +31% YTD 2012 $2.3B +10% +8% -1% North South APAC North Consol. South America EAME America America America 25% 18% APAC 4% EAME 53% EAME – Eur
Slide 7: Net Sales and Operating Margins
Net Sales and Operating Margins Sales Adj. Op. March YTD $M Margin 10% $2,500 Sales $170M $177M 8% $2,000 Adj. Op. Margin 7.5% 7.4% 6% Op. Margin $1,500 Op. Inc. 4% $1,000 2% $500 $0 0% Q112 Q212 Q312 Q412 Q113 2012 2013 7
Slide 8: GSI Results
GSI Results Sales (YTD Thru March 31, 2013) $161M EAME SA Protein APAC 40% • Q1 13 sales down ~5% vs Q1 12 • Full year GSI sales and income expected to be ~ flat vs 2012 NA Grain Storage 60% YTD YTD 8
Slide 9: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2013 Capex Components $400- 425M New IT/Other $341M Products Capex Dep. & Amort. Manufacturing 08 09 10 11 12 13E 9
Slide 10: Free Cash Flow
Free Cash Flow* Q1 Free Cash Flow Full-Year Free Cash Flow ● Seasonal working $326M capital build in first Q1 13 half of year Q1 12 ● Second half of year $150M+ seasonally stronger for free cash flow ● Targeting $150M+ free cash flow in 2013 despite increase in Capex and working ($368M) ($355M) 2012
Slide 11: 2013 Market Outlook
2013 Market Outlook Regional Market Outlook – Industry Unit Retail Tractor Sales (Volume in Units) N. America S. America Western Europe 210K Up 0-5% Down 154K 0-5% Up ~10% 73K 2012 2013E 2012 2013E 2012 2013E 11
Slide 12: 2013 Outlook Assumptions
2013 Outlook Assumptions • Consolidated pricing impact • ~+2.5% • ~15% increase in engineering expense for new product development and tier 4 emission requirements • Gross margin improvement • ~$10 million of start-up expense associated with China operations • Effective tax rate 33-34% (reflects new
Slide 13: 2013 Outlook
2013 Outlook 2013 Estimates Sales $10.5B to $10.7B Operating margin ~ 8% EPS $5.50 to $5.70 CAPEX $400-$425 Million Free Cash Flow* $150 Million+ * Free cash flow is defined as net cash provided by operations less capital expenditures. 13
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Three Months Three Months ended ended March 31, March 31, 2013 2012 Net cash used in operating activities $ (261.3) $ (280.5) Less: Capital expenditures (94.0) (87.1) Free cash flow $ (355.3) $ (367.6) Note: Free cash flow is defined as net cash used
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Projected Year Year ended ended December 31, December 31, 2013 2012 Net cash provided by operating activities $ 550.0 – 575.0 $ 666.4 Less: Capital expenditures (400.0 - 425.0) (340.5) Free cash flow $ 150.0+ $ 325.9 Note: Free cash flow is defined a
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three Months Ended Change due to currency March 31, translation % change 2013 2012 from 2012 $ % North America $ 624.2 $ 566.5 10.2% $ (0.4) (0.1)% South America 465.7 415.4 12.1% (59.4) (14.3)% Europe/Africa/Middle East 1,193.2 1,199.8 (0.6)% (0.7) (0.1)